AI Expectations Hit a Fever Pitch

Summary

Motley Fool Hidden Gems Investing

Episode Title: AI Expectations Hit a Fever Pitch
Date: July 7, 2026
Host: Tyler Crowe
Guests: Lou Weidman & Matt Frankel

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Episode Overview

This episode dives into two major themes:

• The feverish expectations around AI, semiconductor stocks, and the hyperscaler investment race, focusing on recent events with Samsung, Amazon, and the AI chip space.
• Key movements in the defense industry, including Lockheed Martin's strategic acquisitions and the shifting landscape due to advances in defense technologies, particularly drones.

The hosts also field a listener question about navigating stock losses, the sunk cost fallacy, and disciplined investing.

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Segment 1: AI Hype, Semiconductor Stumbles, and the Market’s Perfection Game

[00:02] – Setting the Scene: Samsung’s Big Quarter, Market Reaction

• Tyler Crowe sets up the paradox:

  “Samsung Electronics reported by what I think any measure would be a resoundingly successful quarter. But the stock dropped so much that it caused a circuit breaker suspension of trading on the entire Korean Composite stock price index today.”
  (00:32)

• The sector-wide downturn hit other memory and chip manufacturers, raising the central question: How does a company’s 19x profit become a cue to sell across the entire region?

[01:10] – Why Blowout Earnings Aren't Enough

• Matt Frankel:
  • AI chip and hyperscaler stocks "priced for perfection."
  • Even great quarters can disappoint:

    “When you expect a blowout and you get, as you called it, a resounding successful quarter, it's enough to make the stock drop... investors seem to be questioning whether or not the AI memory chip rally has gotten ahead of itself.”
    (01:15)

  • Micron down 30% since earnings despite strong fundamentals; sympathetic declines for many peers.
  • Massive capital raised via SK Hynix US listing may be adding pressure.

[02:28] – Market Rationality and Taking Profits

• Lou Weidman:
  • Samsung and SK Hynix alone represent over 50% of the Korean index.
  • Despite a large drop, Samsung is up 150% YTD.
  • He frames recent moves as rational profit-taking:

    “The market is forward looking... If it's not going to last forever, at some point you should take profits. I think that's what we're seeing today.”
    (02:52)

[03:28] – Expectation vs. Fundamentals: The Amazon/Alphabet Effect

• Tyler observes AI capital spending is surging, led by hyperscalers who raise massive sums at favorable rates with minimal market anxiety.
  • Amazon raised $25B in debt at "very favorable rates."
  • “Like nearly all hyperscalers … they don’t even raise an eyebrow... And the CFO doesn't even seem to like lose a bit of sleep when they're increasing their annual capital spending budgets.”
    (03:53)

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Segment 2: Is the AI Boom Sustainable? Hyperscaler Debt, Long-term Risk, and Incentives

[04:24] – Big Tech, Cheap Capital, Relentless Expansion

• Lou Weidman:
  • The focus for hyperscalers is maximizing cheap, long-term capital for expansion.
  • Cites Jeremy Grantham: dominance through aggressive, niche expansion is the collective learning.

    “No one is backing down on AI ... you are not going to back down unless you have no other choice.”
    (04:57)

  • This will continue as long as there are “levers to pull.”

[06:01] – Matt on Debt Levels and Investor Appetite

• Context: Amazon's total debt raised reaches $90B YTD; Alphabet, $85B. Overall hyperscaler bond sales could hit $300B this year.

  • “Hyperscaler bond sales are expected to reach about $300 billion this year versus $121 billion for last year ... the investor interest... all been oversubscribed.”
    (06:25)

  • Companies remain lightly leveraged relative to their size; these are investment-grade, oversized entities.
  • Sustainability hinges on whether high-margin AI revenues can justify these investments:

    “These AI investments are going to have to start generating high margin revenue at a pace that satisfies investors. And now that's vague for a reason. We don't know when that's what that means, but that's what we're going to need to see here.” (07:14)

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Segment 3: Defense Industry Movers – Lockheed Martin’s Strategic Acquisition

[08:47] – NATO Summit Backdrop and Lockheed’s Move

• Tyler introduces Lockheed Martin’s $3.45B acquisition of Ultra Maritime, a sonar specialist, suggesting a diversification away from heavy reliance on its F-35 fighter business.

[09:33] – Why the Deal?

• Lou Weidman:
  • Lockheed is already highly diversified, yet F-35 is still 30% of revenue.
  • Such deals are about “augmenting R&D with bolt-on deals.”
  • This acquisition is opportunistic, not transformative:

    “You are buying here is the R and D. What you are buying is access to technologies, kind of access to the supply chains more than you are new platforms.” (10:44)

[11:21] – Positioning for Undersea Defense

• Matt Frankel:
  • It’s a small deal (<5% of revenue) but meaningful for anti-submarine warfare, a rising global defense priority.
  • “Undersea deterrence is a big priority of US NATO in response to what's going on overseas and in the conflicts we're seeing.”
    (11:31)

[11:55] – Defense’s Digital Shift: Drones and Smarter Systems

• Tyler highlights growing use of cheap, single-use drones—potentially a major industry change. He asks if this shift threatens the traditional model of giant, integrated platforms built by defense primes.

[13:05] – Drones, Supply Chains, and What Investors Need to Know

• Matt Frankel:
  • The Pentagon is buying drones at scale (“hundreds of thousands”), treating them as consumable supplies, not permanent assets.
• Lou Weidman:
  • Despite simplification, even small drone companies are complex integrators.
  • Drones' mass-market appeal reduces profitability; the opportunity is in volume, not margins.
  • Crucially, value is moving “from just the people who make the big objects to the ones that make them smart. The electronics.”

    “This will continue … The middle market is brutal. For defense contractors, there is almost not a middle market. … The biggest competitive advantage the primes have is their ability to work on the timetable and communicate with the Pentagon. ... Most of these companies will not be independent in five to 10 years, the successful ones, there might be one or two new companies that come out of it. Most of them will be part of bigger portfolios.” (14:17–15:36)

  • The market for sophisticated systems is consolidating toward larger primes.

[16:10] – Portfolio Shuffling: The Defense Industry’s Nature

• Anecdote on how defense tech (like sonar) gets shuffled between primes, stressing the hot-potato and optimization nature of the industry.

[16:15] – Deal Prices and Valuations

• Lou comments: Lockheed paid about 4x sales for Ultra. High multiples may mean much of the future growth is already priced in.

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Segment 4: Listener Question – Sunk Cost Fallacy in Investing

[17:56]

• Listener Lisa asks when to sell losing stocks, referencing the sunk cost fallacy.

Matt Frankel:

• Sunk cost fallacy = letting past costs influence future decisions.
  • “What you originally paid for a stock has nothing to do with whether or not it's a good investment. ... If you had cash today instead of these shares of stock, would you choose to buy that exact stock at today's price? If the answer is no, it's probably a sign that you should go ahead and move on.”
    (19:09)
• Emotional attachment, not just rational analysis, makes selling hard—personal anecdote about holding Boston Omaha longer than Tyler suggested.

Lou Weidman:

• He focuses on updating the original thesis:
  • “For me, I try and focus on the reasons I bought in the first place and ask myself if they're still valid. If anything, time just gives you added data...But if the reasons are still valid ... I try and hold on. If they're not, then ... I probably should sell.”
    (20:07)

Tyler Crowe:

• Stresses separating business fundamentals from price action.
  • “...trying to find that separation of is it stock valuation related or is it business change related and finding the difference between those two can really help you make those sorts of decisions.”
    (21:33)

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Notable Quotes & Highlights

• On Markets Reacting to 'Good News':

  “The amount of good news that has been priced into these stocks seems to have gone a little bit too far.”
  – Matt Frankel (02:15)

• On Hyperscalers and AI Arms Race:

  “No one is backing down on AI in that scenario, especially since AI has been presented as the holy grail, the, you know, the quest like no other. You are not going to back down unless you have no other choice.”
  – Lou Weidman (04:57)

• On Defense Industry Shifts:

  “The value is shifting from just the people who make the big objects to the ones that make them smart. The electronics. That's the story behind the emergence of L3Harris.”
  – Lou Weidman (14:38)

• On Investing Psychology:

  “What you originally paid for a stock has nothing to do with whether or not it's a good investment.”
  – Matt Frankel (18:58)

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Key Takeaways

• The AI, chip, and hyperscaler rally has set up incredibly high investor expectations—even huge profit leaps can disappoint.
• Big Tech is raising vast sums of cheap, long-term capital, betting on sustained AI-led demand. For now, markets are accommodating, but sustainability depends on visible, high-margin AI returns.
• Defense industry trends echo the digital transformation underway in tech. It's less about bigger hardware, more about intelligence, sensors, and integration—primes are consolidating control through acquisitions of tech-rich smaller firms.
• For individual investors, long-term success requires re-evaluating investments based on current business prospects, not past purchase prices. Be mindful of psychological traps like the sunk cost fallacy.

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Timestamps for Key Segments

• 00:02 – Opening, Samsung earnings, AI chip market shock
• 01:10 – The investor expectations ratchet, why 'great' isn't good enough
• 03:28 – Hyperscalers, massive capex, Amazon raises $25B
• 04:24 – Debt dynamics, sustainable AI-driven expansion?
• 08:47 – NATO summit, Lockheed acquires Ultra Maritime
• 11:21 – How the deal shifts Lockheed’s positioning
• 11:55 – Drones and defense, how cheap systems reshape the sector
• 13:43 – Electronics are the new battleground in defense
• 17:56 – Listener Q&A: Sunk cost fallacy and investment discipline

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Transcript

[Tyler Crowe]

Meeting lofty AI earnings expectations today on Motley Fool. Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host Tyler Crowe. And today I'm joined by longtime fool contributors Lou Weidman and Matt Frankel. We're going to talk about defense companies later in the show, talking about kind of some of the big moves that are happening in the industry lately and as well as hitting letters or questions. But before we get started today, you know, I hyperscalers, those builders of AI, they just keep spending more and more and semiconductor companies are posting record results. But even that doesn't seem to satisfy the market. Samsung Electronics reported by what I think any measure would be a resoundingly successful quarter. But the stock dropped so much that it caused a circuit breaker suspension of trading on the entire Korean Composite stock price index today. Those losses have carried more or less over into the semiconductor space today as many memory and processing chip manufacturers are down as of this morning. So guys, how on earth did we go from profits up 19 times compared to this time last year at Samsung to stop the entire Korean stock market?

[Matt Frankel]

Yeah, so I mean, a lot to unpack there. So a lot of these stocks were priced for not necessarily perfection, but to report blowout quarter after blowout, quarter after blowout quarter. When you expect a blowout and you get, as you called it, a resounding successful quarter, it's enough to make the stock drop. We've seen this with several recent earnings reports and not just in the memory space. Several of Nvidia's reports look fantastic and the stock ends up falling. In Samsung's case, yes, you're right, they are expecting a roughly 19 times increase in quarterly operating profit. But that's being driven by AI memory demand. And investors seem to be questioning whether or not the AI memory chip rally has gotten ahead of itself. And it's not just Samsung. If you look at Micron, for example, even before today's, you know, kind of sympathy drop, it was down by about 30% since earnings and that was just a couple weeks ago. So the company also slightly missed revenue guidance. So it's not a flawless quarter. And there's also SK Hynix US listing that raised billions and billions of dollars of capital. And that could be adding pressure as memory there's just more memory stock supply in the market right now. I mean, the bottom line is you're right, Samsung didn't have a bad quarter by any definition. But the amount of good news that has been priced into these stocks seems to have gone a little bit too far.

[Tyler Crowe]

Yeah.

[Lou Weidman]

On the market, halting the market thing, it's important to note that two companies, SK Hynix and Samsung, make up about 53% of the Korean total market index. So this one company can hold to market kind of. But look, even with this, Samsung is up 150% to date, others are up more. This seems 100% rational to me. The market is forward looking. We're always looking to the future. This is either going to last forever or it's not. And if it's not going to last forever, at some point you should take profits. I think that's what we're seeing today. I don't think there's really too much to read into it. More than that, I think investors are looking at the same world that I, I think the rest of us are in saying, look, this has been great. I don't know if it can go on forever. I'm going to book some gains.

[Tyler Crowe]

The thing that's hard for me to

[Unidentified Contributor]

also rationalize when we're talking about the expectations game of all of this is that even by most standards, this is

[Tyler Crowe]

looking from a fundamental basis. You look at the underlying numbers of capital investment and all that stuff, it still looks incredible. It's almost hard to fathom that this can't meet the appetite of what Wall Street's expecting. I mean Amazon earlier today announced it was raising about $25 billion in debt and at very favorable rates. I mean, of course it's Amazon. What else would you expect? I mean this isn't the first company to do it either. I mean Alphabet's tapped the debt and equity markets this year and like nearly all hyperscalers from Alphabet to Amazon, Meta, you name it, they don't even raise an eyebrow. Or even like the CFO doesn't even seem to like lose a bit of sleep when they're increasing their annual capital spending budgets seemingly every quarter. So like how do we rationalize these wild stock moves and what we saying, playing the expectation games when the fundamentals still look surprisingly strong?

[Lou Weidman]

Yeah, first of all on Amazon, okay, for these big companies the focus is always on cost of capital. You raise money at the most cost effective way you can. And as you said, they're getting very favorable rates here. 40 year money at less than 150 basis points above US treasury treasuries. That is a really, really good deal given their massive cash needs. Forget AI, what about logistics, everything else. And given the cost here, they'd be crazy not to do this. So I don't think this really says anything. Other than they are a large company doing as they should. As to the bigger question though, of like, what's going on here? Is it sustainable? Why is there this dissident? I think, and I got to credit Jeremy Grantham here, the very, very, very smart investor, this is his point, but it's such an important one. All of these companies, all of the Mag 7, all of the hyperscalers, Amazon, Alphabet, all of them got to where they are by jumping into a niche and dominating it. The collective learned experience from this group of leaders is the pathway to excess is to build your empire, claim your turf as quickly as possible. No one is backing down on AI in that scenario, especially since AI has been presented as the holy grail, the, you know, the quest like no other. You are not going to back down unless you have no other choice. So are things getting out of hand? Maybe, probably. But I really believe that these companies, it will continue until they can't. And the debt raise here is a reminder. There are still plenty of levers to pull and so they will be continuing.

[Matt Frankel]

Yeah, I mean, just to throw some additional context behind that, I mean this isn't just a $25 billion capital raise from Amazon. This is in addition to the $65 billion or so they've already raised this year through bond sales. I mean, so that's $90 billion from Amazon this year. Alphabet's raised about $85 billion in debt over the past year. And they might not be done. I mean I saw one statistic that total hyperscaler bond sales are expected to reach about $300 billion this year versus $121 billion for last year. And Lou's right, these terms are very favorable, especially for 40 year bond. That extra purpose of not only low cost capital but locking in the rate for decades, protecting from interest rate fluctuations and I mean the investor interest. We're seeing all of these deals that I just Talked about, the 85 billion in deals from Google, they've pretty much all been oversubscribed. So it shows that any further capital raises this year are likely to not be a problem. And both these companies still have very low leverage ratios, at least on paper. These are massive, massive companies. I mean 0.4 to 0.7% debt to EBITDA ratios is what we're seeing here. The overall investment grade credit rated average is about three times debt to ebitda. So there's a lot of cushion here. At the same time, these are the first time these mega cap tech companies are really adding this type of debt to their balance sheets. So the question of whether or not it's sustainable. These AI investments are going to have to start generating high margin revenue at a pace that satisfies investors. And now that's vague for a reason. We don't know when that's what that means, but that's what we're going to need to see here.

[Unidentified Contributor]

Well, we'll keep playing the quarterly expectations game because we do have second quarter earnings coming up in the not too distant future here.

[Tyler Crowe]

Coming up after the break, we're going

[Unidentified Contributor]

to do some movers and shakers in the defense industry.

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[Tyler Crowe]

So with the NATO summit happening this week in Ankara, Turkey, there's likely going

[Unidentified Contributor]

to be a lot of defense related announcements this week and in the coming

[Tyler Crowe]

days because, you know, a bunch of CEOs get together, they start talking, you know, deals start to happen. And we got one of the first ones yesterday when Lockheed Martin announced it was acquiring sonar specialist, its private company, ultra Maritime for 3.45 billion. Now I get that this on a Lockheed scale thing is a relatively small deal, but does this change the company's standing in the industry at all? Correct me if I'm wrong, Lou, but I think Lockheed is trying to diversify its portfolio, not be quite as reliant on the F35 fighter, which has been kind of their, like, call it like their flagship platform for a while.

[Unidentified Contributor]

Yeah.

[Lou Weidman]

So Lockheed Martin is arguably the most diversified portfolio in the sector, but the F35 is still a lot of it, about 30% of annual revenue. Lockheed does helicopters, they do missiles, missile defense, sensors, space. So they, they do A lot of things and a lot of those capabilities, especially in areas like sensors and electronics, came via acquisitions. The primes have a long history of augmenting their R and D with bolt on deals. That's part of the trend here. This is an area where, you know, LA isn't as strong as maybe some other players. It is an area of interest among many other things. But so it fits well in the overall trend. But I don't think this is really a statement deal as much as it is opportunistic.

[Tyler Crowe]

So Lou, when you talk about bolt

[Unidentified Contributor]

on deals, and this is something I think I've seen you write about for, I don't know, probably like the past

[Tyler Crowe]

10 years, is the idea of there's

[Unidentified Contributor]

only so much acquisition that the companies like Lockheed can do because it's a

[Tyler Crowe]

pretty consolidated industry when it comes to the defense primes. And there's certainly no place where, I

[Unidentified Contributor]

don't know, Lockheed and RTX can join forces these days.

[Tyler Crowe]

Right?

[Lou Weidman]

Yeah. And nor do they want to really. But yeah, I think the way to think of this isn't necessarily it's hard to add platforms. Lockheed did it when they bought Sikorsky, so there are some opportunities there. But in that case the seller just wanted out. So the Pentagon needed to get a good home for the helicopter business. What you are buying here is the R and D. What you are buying is access to technologies, kind of access to the supply chains more than you are new platforms. And that's where you see most of the prime deals happen.

[Unidentified Contributor]

And Matt, just for some context here, like Lou was talking about helicopters, space

[Tyler Crowe]

aeronautics and stuff like, you know, it didn't mention as much about submarines and sonar. So in terms of like Lockheed, where

[Unidentified Contributor]

does this kind of position them a little bit?

[Tyler Crowe]

This is moving into new territory here.

[Matt Frankel]

Yeah, I mean, so you're right in the sense that this is a very small deal in the overall business. It's less than 5% of Lockheed's total annual revenue. It does significantly grow the position in anti submarine warfare. And that's really an area of defense where we're seeing global demand rising right now. Undersea deterrence is a big priority of US NATO in response to what's going on overseas and in the conflicts we're seeing.

[Unidentified Contributor]

Yeah, certainly anything that can be tied to intelligence, sensors seeking, stuff like that versus metal bending seems to be the trend here.

[Tyler Crowe]

And that's one of the things I

[Unidentified Contributor]

found most intriguing about this ultramaritime deal

[Tyler Crowe]

is I think it hits at one of the lesser discussed stories in the Defense industry. And that's the changing priorities for defense funding. One thing that has become abundantly clear in conflicts this decade, whether it be Iran, Ukraine, elsewhere, is the emergence of small, cheap, single use drones that are very, very effective against much, much more expensive equipment. And is this trend like a complete game changer to the industry? I mean I certainly think though, or you know, what do you guys think? Is it that or just like a supplemental add on? Because the way I see it, drones and smaller equipment doesn't require like the massive supply chains and coordinated efforts to build the F35 or a gigantic aircraft carrier or something like that. You know, the things that Lockheed, Northrop, Grumman and the other defense prime contractors have specialized in for decade, is taking 27 different subcontractors, pulling them all together and doing something epically large. Single use drones, I don't know, 15, 25 pounds, a couple explosives in a remote control. It seems to really change the way we're doing things here.

[Matt Frankel]

Yeah, I mean the emphasis on cheap single use drones, it's a clear shift in defense budgets. It's happening alongside the traditional contract model, not necessarily replacing it. It's a big line item in the Pentagon's budget right now, but the traditional line items have mostly increased as well. I mean the Department of War, they have their drone dominance program that aims to buy hundreds of thousands of small attack drones, but they've consider them consumable supplies, not as durable equipment. So the Pentagon's ordered about 22,000 of these. So that's, you know, it's not a small order and production is just ramping up. But these are different tools for different jobs compared to like fighter jets, submarines and missile systems.

[Lou Weidman]

So there is some supply chain simplification. But I think if you look at some of these big companies like Aerovironment or Kratos, you will see that there is still pretty complex supply chains. These are at the end of the day systems integrators and you still need to do that work. It's just at a different scale. The issue as an investor, as a business story with these low cost drones is what makes them intriguing to defense planners, makes them I think less intriguing for investors. The cost, you really have to make it up on volume here. The bigger trend though, Tyler, and you mentioned this kind of the move away from metal bending. The big trend here is the same trend you see in every other industry, digitalization. The value is shifting from just the people who make the big objects to the ones that make them smart. The electronics. That's the Story behind the emergence of L3Harris. That's the story of Lockheed wanting to buy Ultramarin. This will continue. All right, the thing is, and the real big trend here, as far as whether it replaces the primes, I think it actually ends up working for them. The middle market is brutal. For defense contractors, there is almost not a middle market. It just gets consolidated out of business because it's a tough business to survive. The big biggest competitive advantage the primes have is their ability to work on the timetable and communicate with the Pentagon. That is hard for especially a Silicon Valley startup to learn. Most of these companies will not be independent in five to 10 years, the successful ones, there might be one or two new companies that come out of it. Most of them will be part of bigger portfolios. Less successful one will be sold for parts. But I think this is just continuing a 20 or 30 year story in just looking to smarter rather than just powerful big mammoth equipment to the portfolio

[Unidentified Contributor]

shuffling, moving around thing. Just an anecdote and it kind of speaks to that industry in general. I have an uncle that works on basically sonar electronics for the Navy and that particular project has I think moved to five different defense primes at any given time. And it really shows like, you know, the hot potato nature that, you know, one, one moment it could be a part of one portfolio, could be part of the other. There seems to be a lot of shuffling around and optimization of assets. And it wouldn't be surprising to see a lot of, like you said, the smaller middle market, people either getting gobbled

[Tyler Crowe]

up or sold off for parts. And you know, we'll take a little bit of this here and then sell off the rest.

[Lou Weidman]

The one, I think, interesting thing too here because you have so many companies, even there's one that's really popular in underwater uncrewed vehicles. Lockheed sort of just put a valuation multiple on these. You know, they're paying about four times sales for Altra, which I think it's interesting now as an investor to compare that to some of the public company valuations out there may suggest that a lot of the future growth is priced in.

[Unidentified Contributor]

I feel like you want to name a company here. Do you want to name a chamber?

[Lou Weidman]

No, there's a lot of them. Let's just leave it at that. I think as an investor you should always look at the comps though.

[Tyler Crowe]

Coming up after the break, we're going

[Unidentified Contributor]

to hit some podcast questions.

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[Tyler Crowe]

Hey everyone, quick reminder, if you want to get your question read on air, go ahead and email [e-mail] that's podcasts with an swl.com just remember, keep it foolish, keep it short, and don't ask for any try to any kind of personalized advice because we certainly can't do

[Unidentified Contributor]

that without getting in trouble.

[Tyler Crowe]

So today's question comes from Lisa and the question is I. I just heard about the Sunk Cost Fallacy. I'm a new investor to individual stocks and I've been holding onto some stocks that have had significant losses. I've also been looking at some stocks with huge gains in my portfolio. Wonder what point do investors reinvest in companies that could gain money instead of lose it? So far I haven't sold for loss and I feel like I'd be opening up a can of worms for myself mentally. Thank you for the awesome advice. I listen to your podcast daily. Thank you Lisa for the kind words. And Matt, before you give your answer to Lisa's question, why don't you just give us a quick refresher on Sunk Cost Fallacy for anybody who may not necessarily be as aware of it?

[Matt Frankel]

Yeah, so the Sunk Cost Fallacy. It refers to letting money or effort that you've already spent influence a forward looking decision. So to put that in the context of what we're doing here, what you originally paid for a stock has nothing to do with whether or not it's a good investment. Today Lou bought rocket lab for $3 a share. That has nothing to do with whether or not it's a good investment at the current price. So only the current state of the business and its future growth prospects do so psychologically, making a loss real by selling it is a tough hurdle to overcome. Honestly, it's probably why I held onto Boston Omaha for two years longer than Tyler said I should have. It essentially serves to confirm a decision didn't work out the way you want it to, which can be difficult to accept. So try asking yourself this question. If you had cash today instead of these shares of stock, would you choose to buy that exact stock at today's price? If the answer is no, it's probably a sign that you should go ahead and move on. Remember that selling today doesn't mean that your original decision was wrong. It just means that the stock is no longer a good investment right now. It could 100% be the right move when it's based on today's information.

[Lou Weidman]

Got a similar answer. For me, it's always I try and focus on the reasons I bought in the first place and ask myself if they're still valid. If anything, time just gives you added data, you know, so you can maybe make a more informed decision. But if, if the reasons are still valid, I, I, I, whether it's up big or down or down big, I try and hold on. If they're not, then yeah, I probably should sell. It's possible my original reasons to buy were wrong. If something's way down. So I think you again, the additional time gives you data you should reassess. But I don't personally let performance drive my buy and sell decisions. Most stocks I'm buying I'm hoping to hold for a long time in decades, not quarters. So if things haven't worked out in a year or so, say, that isn't necessarily a reason to believe it can't work out long term, but you'd be crazy not to at least reassess and look at what has happened since you bought.

[Unidentified Contributor]

Yeah, this is a really relevant sort of question too for a lot of people because we've seen recently single stock

[Tyler Crowe]

investing has been quite volatile relative to times we've ever seen.

[Unidentified Contributor]

We were just talking about at the

[Tyler Crowe]

top of the show, big moves in

[Unidentified Contributor]

semiconductor stocks that are moving hundreds of billions of dollars in any given day.

[Tyler Crowe]

So it can be extremely challenging to separate the business case, which I think for most of us is the thesis that you buy a stock versus the

[Unidentified Contributor]

price mechanicians in any given moment, the

[Tyler Crowe]

valuation and that can be a hard

[Unidentified Contributor]

bridge for a lot of people to cross or get over when it comes

[Tyler Crowe]

to investing is understanding, you know, have the business fundamentals of why I bought this business still maintain and is what I'm seeing today more valuation related than

[Unidentified Contributor]

it is related to actual deterioration of

[Tyler Crowe]

business or a management change or something that you know may materially change the trajectory of the business? So as you're thinking through these things, trying to find that separation of is it stock valuation related or is it business change related and finding the difference between those two can really help you make those sorts of decisions. As always, people in the program may have interest in the stocks they talk about, and the Motley fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show Notes. Thanks for producer Dan Paul and the rest of the Molecule team for Lou, Matt, myself, thanks for listening and we'll chat again soon.